Scenario 13-7
Wanda owns a lemonade stand. She produces lemonade using five inputs: water, sugar, lemons, paper cups, and labor. Her costs per glass are as follows: $0.01 for water, $0.02 for sugar, $0.03 for lemons, $0.02 for cups, and $0.10 for the opportunity cost of her labor. She can sell 300 glasses for $0.50 each.
-Refer to Scenario 13-7.What are Wanda's explicit costs per glass?
A) $0.18
B) $0.10
C) $0.08
D) $0.02

Question

Quizplus · Accepted Answer

Explicit costs are the direct, out-of-pocket payments for inputs. For Wanda, these are $0.01 for water, $0.02 for sugar, $0.03 for lemons, and $0.02 for cups, totaling $0.08 per glass.

Scenario 13-7 Wanda Owns a Lemonade Stand. She Produces Lemonade Using Five